U.S. regulators’ decision on whether to start a defect
investigation, which can lead to a recall, will depend whether
they see three fires in five weeks as freak occurrences or
evidence of a design flaw in the plug-in car.

“There’s no Pinto moment here,” said Dan Edmunds,
director of vehicle testing at Edmunds.com, an automotive
information website based in Santa Monica, California, referring
to the Ford Motor Co. car recalled in the 1970s after deadly
gasoline fires. “They may look at it and say it’s actually not
that bad.”

A fire erupted in a Model S in Tennessee last week after
its owner said he ran over a trailer hitch loose in the road at
70 miles (113 kilometers) per hour. The circumstances resembled
an Oct. 1 incident in Washington state in which a car struck a
piece of metal. Another fire occurred after a crash in Mexico
that was reported Oct. 18.

Tesla closed at $137.80 yesterday, down 29 percent since
the first fire was reported. The stock gained more than five-fold this year through Sept. 30, when it reached a record
closing price of $193.37.

The National Highway Traffic Safety Administration said
Oct. 24 it found no evidence the first fire resulted from
defects or violations of U.S. safety standards. That came two
months after the Model S received the top five-star rating in
each category of the agency’s crash tests.

‘Constant Contact’

“We literally are in constant contact with them,” Musk
said of regulators, in an interview after a Business Insider
conference in New York yesterday.

“NHTSA has real problems to deal with where people die or
are seriously injured. Their time is preoccupied with that, not
with fictional issues created by the media.”

NHTSA hasn’t discussed the Tennessee fire beyond a Nov. 8
statement in which it said it’s in close communication with the
company and local authorities, gathering information about the
incident to determine if additional action is necessary.

In a defect investigation, officials would look at how
frequently Tesla fires were occurring compared to other
vehicles, whether they were happening under predictable road
conditions, and whether crashes were leading to unusual numbers
of fatalities or injuries.

Agency investigators must weigh whether a part is failing
under reasonably foreseeable driving circumstances, and whether
the failure is safety-related, said Allan Kam, a former senior
enforcement attorney with NHTSA.

Aluminum Shield

Musk defended the Model S’s safety record yesterday at the
New York Times’ Dealbook conference in New York, saying the
sedan is “five times less likely” to have a fire than a
gasoline-powered car.

While the Model S has proven excellent in protecting
passengers, NHTSA “absolutely has to investigate” because it
appears the metal shielding on the car’s undercarriage can’t
prevent road debris from penetrating its lithium-ion battery
packs, Clarence Ditlow, executive director of the Washington-based Center for Auto Safety, said Nov. 7.

NHTSA has investigated fires in two other electric cars,
the hybrid-electric General Motors Co.’s Chevrolet Volt and the
Fisker Automotive Inc.’s Karma plug-in. The Karma was recalled
and GM voluntarily reinforced the battery packs on Volts, after
one caught fire following a NHTSA crash-test.

Gasoline-Powered Cars

Fires in gasoline-powered cars have led to some of NHTSA’s
biggest defect investigations. Earlier this year, the agency and
Chrysler Group LLC clashed over fixing 2.7 million Jeep Grand
Cherokees for gasoline tanks that can leak in a crash. The
agency says 51 people have died in post-crash fires.

Chrysler initially challenged a government-requested
recall, which would have set up a rare public hearing and court
case, before agreeing to a “voluntary campaign” to provide
more protection in rear-end collisions.

Consumer Reports gave the Model S one of its highest
ratings ever based on its test drives and reliability data
reported by more than 600 owners, said Jake Fisher, the
magazine’s director of automotive testing. None of the surveyed
owners reported battery performance issues, including fires,
Fisher said.

The owner of the Model S that burned in Tennessee, Juris
Shibayama, posted a first-person account of the crash on Tesla’s
website Nov. 9. He described seeing a truck in front of him
driving over a “rusty three-pronged trailer hitch” sticking up
with the ball up in the air.

‘Firm Thud’

“I felt a firm thud as the hitch struck the bottom of the
car, and it felt as though it even lifted the car up in the
air,” Shibayama wrote.

The car messaged to Shibayama to pull over and that the
vehicle would be shutting down. He got to the shoulder safely.
Smoke started to appear under the car within 10 seconds of
getting out of the car, which caught on fire about two minutes
later, he said.

The experience hasn’t shaken Shibayama’s faith in Tesla. He
said he still thinks of the brand as safe and he would “buy
another one in a heartbeat.”

If the more recent crash involved a large object that would
have damaged any conventional car, NHTSA may decide there’s no
design flaw, Fisher said. There would be more concern if the
cars were erupting in flames spontaneously, as happened with
Fisker cars, he said.

Wall Street

Teslas on the road now are being pelted with rocks and
other road debris as any other car is in ordinary driving,
Fisher said. If there were a design defect with the car’s 6-millimeter aluminum battery shield, there would probably be more
fires, he said.

Still, the incidents point to gaps in NHTSA regulations,
Fisher said.

The Model S earned five-star ratings on the agency’s crash
tests, which involve striking a flat barrier with the front of
the car at 30 mph. The agency doesn’t have a test for assessing
the strength of Tesla’s battery shield, which stretches from
axle to axle and side to side.

Nor do NHTSA regulations on fire prevention, which are
written to minimize the amount of gasoline spilled in a fuel-tank rupture, apply to electric cars.

Fires are almost automatically considered safety-related,
Kam said, so the question for regulators is whether a car could
be designed to withstand the circumstances that caused the
fires. Cars generally aren’t built to go over sharp, rigid
objects at high speeds, he said.

The agency doesn’t have a history of forcing expensive
recalls, said Sean Kane, president of Safety Research &
Strategies, Inc., a Rehoboth, Massachusetts-based company that
consults on automotive issues for attorneys and advocates for
tougher regulations.